Alternative litigation financing, also known simply as liti gation financing, is the funding of litigation activities by entities other than the parties to a lawsuit themselves, their counsel, or other entities with a pre-existing contractual relationship with one of the parties, such as an indemnitor or a liability insurer. The third-party financer provides capital to a litigant for living expenses or legal costs, and in return takes a portion (usually ranging from 5 to 40 percent) of the litigant’s financial recovery from the lawsuit. A key component of litigation financing is that, unlike an ordinary loan, any payout to the financer is contingent on the successful outcome of the legal claim.